KHI News Service

Leavitt report: Kansas lawmakers remain cool to Medicaid expansion

But hospital association might find more support for an Iowa-type plan

By Jim McLean | February 17, 2014

Kansas policy makers are generally opposed to expanding Medicaid unless a more private-sector approach is used, according to a briefing paper written by a consulting firm headed by former U.S. Secretary of Health and Human Services Secretary Mike Leavitt.

The 40-page paper written by Leavitt Partners for the Kansas Hospital Association finds that widespread opposition to the Affordable Care Act in Kansas extends to the issue of Medicaid expansion.

It would be “extremely difficult and likely impossible” for expansion supporters to win legislative approval for any “proposals that resemble ‘Obamacare,’” the report states. But, it goes on to say that the Legislature is “much more open to market-based solutions” for extending coverage to tens of thousands of low-income adults not eligible for Medicaid.

Kansas is one of 23 states that have not chosen to expand Medicaid to include adults earning below 138 percent of the federal poverty line — $15,856 for individuals and $35,325 for a family of four.


Leavitt report executive summary

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Tom Bell, president of the KHA, said the Leavitt Partners report confirms what he already knew, that opposition from Gov. Sam Brownback and Republican legislative leaders to Obamacare is the biggest barrier to expanding Medicaid eligibility in Kansas.

“The Affordable Care Act is not popular in Kansas,” Bell said. “That’s understandable. But I think you have to try to look at the benefits of this program (Medicaid expansion) on their own merits. And you also have to look at the fact that the negatives of the Affordable Care Act for hospitals are being implemented, but the positives are not.”

About 40 people rallied today at the Statehouse trying to persuade policymakers to expand Medicaid eligibility. Two lawmakers, both Wichita Democrats. spoke to the group and expressed support for the ralliers' goals: Rep. Jim Ward of Wichita and Sen. Oleatha Faust-Goudeau.

"One of my best friends died last night from heart problems," said Ryan Pritchett of Overland Park, one of the ralliers. "He could have had life-saving surgery three years ago but didn't have health insurance. This is something I feel very passionate about."

Bell said Kansas hospitals have been forced to absorb reductions in Medicare payments without the offsetting increase in Medicaid that was supposed to result from thousands of uninsured Kansans becoming eligible for the program. A website launched last week by the Kansas Medicaid Access Coalition uses a continuous “ticker” to display how much money Kansas has lost since Jan. 1 by not expanding Medicaid.

By Monday morning the total was $51 million and climbing.

“We’re wasting our Kansas taxpayer dollars on other states who are taking advantage of Medicaid expansion,” Bell said.

The federal government has pledged to pay 100 percent of expansion costs for three years, after which the federal share will gradually decline to 90 percent, where it will remain.

An earlier analysis done for KHA by George Washington University and economic modeling firm concluded that expanding Medicaid eligibility would inject another $3 billion into the state economy and create 4,000 jobs by 2020.

Rejecting expansion will cost Kansas an estimated $5.3 billion in federal aid between 2013 and 2022.

Alternative routes to expansion

The consultant’s report provides Kansas policy makers with alternatives to traditional Medicaid expansion, Bell said.

“It’s not a plan, it’s kind of a roadmap,” he said. “If you’re looking for ‘what should Kansas do,” it’s not in here. But if you’re looking for ‘what could Kansas do,’ it’s here.”

The report states that a “best fit” for Kansas would be some sort of combination of market-based approaches being taken in other states where opposition to Obamacare is high. In those states — which include Arkansas, Iowa and Pennsylvania — policymakers have received or are requesting federal approval to use Medicaid funds to subsidize the purchase of private insurance for low-income adults. Some are requiring newly eligible recipients to share some of the cost of their care and to either have a job or demonstrate that they are actively seeking one.

Photo courtesy Kansas Hospital Association

Tom Bell, president and CEO of the Kansas Hospital Association.

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“The recent approval of state models such as Arkansas and Iowa signal willingness on the part of the federal government to entertain and act favorably to plans that rely on state-designed, market-based solutions,” the consultants concluded. “As such, should Kansas decide to pursue a similar plan that includes federal participation, it would likely receive serious consideration from CMS (Centers for Medicare and Medicaid Services).”

But it remains unclear if that approach will be acceptable to lawmakers this year or next. The idea didn't seem to have much support among a group of people interviewed at a Statehouse rally on Monday. About 40 people attended the event, urging lawmakers to open up the program.

"I'm a public school teacher and have seen what's happened with charter schools," said Anne Pritchett of Overland Park, one of about 40 people who came to the Statehouse on Monday urging lawmakers to expand Medicaid. "Privatization is not the answer. Public education and health care are two things that shouldn't be privatized."

But Bell said, an idea being pursued by other states of linking expansion to improving the quality and efficiency of care seems tailor-made for Kansas, which last year contracted with three private companies to manage the care of Medicaid recipients.

“In our mind that links up very nicely with the KanCare program,” he said. “That’s what KanCare is all about.”

Positive reception, but...

The hospital association delivered copies of the consultant’s report to Gov. Sam Brownback and to legislative leaders on both sides of the aisle. It also provided briefings to several of the legislators.

The market-based options outlined in the report coupled with a growing awareness of how many Kansans could remain uninsured because they would be ineligible for both Medicaid and federal subsidies to help them purchase private coverage has spurred renewed interest in talking about expanding Medicaid eligibility, Bell said.


Nearly 182,000 Kansans in the ‘Eligibility Gap’

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About 78,000 Kansans currently without health insurance could potentially gain it — should state leaders choose to open up the program — according to a recent report from the Kansas Health Institute, the parent organization of the KHI News Service.

If state leaders chose not to open the program, such Kansans would fall into what is being called the Medicaid gap due to the fact that the state has some of the most restrictive eligibility standards in the nation.

Brownback has expressed no support for expansion but has said he might be open to discussing the kind of market-based approaches outlined in the consultant’s report if federal officials show a consistent willingness to be flexible with states.

Senate President Susan Wagle, a Wichita Republican, continues to be among the most willing to put the issue Medicaid expansion on the table, Bell said.

“We’ve had a lot of discussions with Sen. Wagle about how all this might play out and I think she’s interested in having a discussion but I think she also recognizes the political reality of where we’re at as well,” he said.

That reality, Bell said, is that Medicaid expansion is likely to remain a “heavy lift” until after the 2014 election.

“We disagree with that, but if they are of that mindset, we ought to enter 2015 with some idea about where we want to go,” he said. “To do that we need to be talking about it now.”

Bell said he hopes that the consultant’s report will serve as a “catalyst” for serious discussions about expansion that could result in a plan being submitted for federal approval late this year or early next.

KHI News Service coverage of Medicaid expansion

Medicaid Access Coalition launches online "ticker" showing foregone federal dollars (2/13/14)
→ KHI report: Nearly 182,000 Kansans in the ‘Eligibility Gap’ (1/11/14)
House speaker says Medicaid expansion is "up to the governor" (1/10/14)
KS Senate president says Medicaid expansion unlikely to gain approval this session (1/7/14)
Profiles of the coverage gap: Kathleen Christian (1/6/14)
Efforts continue to expand Medicaid in Kansas and Missouri (1/6/14)
Hospital association hires former Bush HHS secretary to help craft a plan Kansas Republicans might support (12/23/13)
Iowa wins approval to expand Medicaid by using federal funds to buy private insurance (12/11/13)
White House officials hold call to urge Medicaid expansion in Kansas (11/21/13)
Republican governor talks up plan to expand Medicaid — his way (10/28/13)
Challenger says Brownback owes voters a decision on Medicaid expansion (10/22/13)
Nearly 5.2M Americans fall in coverage gap in states not expanding Medicaid (10/16/13)
Sebelius: Feds flexible on how states expand Medicaid (9/22/13)
Sebelius says Kansas and Missouri are missing the boat on Medicaid expansion (9/20/13)
Medicaid expansion coalition finds strength in numbers (9/17/13)
Republican Gov. Corbett proposes expanding Pennsylvania Medicaid (9/16/13)
Kansas lawmakers urged to consider Medicaid expansion by Wesley CEO (8/29/13)
Estimating maneuver could help more people gain from Obamacare: How the poor might qualify for Affordable Care Act subsidies in states that don't expand Medicaid (8/12/13)
Report: States not expanding Medicaid stand to benefit most from doing so (7/18/13)
CMS won’t penalize hospitals in states slow to expand Medicaid (5/14/13)
Insurer Centene: We can do Arkansas-style Medicaid (5/14/13)
The Arkansas Medicaid Model: What you need to know about the 'private option' (5/2/13)
Nothing to be done about coverage gap in states not expanding Medicaid, feds say (4/29/13)
Brownback says he's listening to Medicaid expansion proponents, opponents (4/5/13)
Oregon shows costs of putting Medicaid enrollees in private coverage (3/29/13)
Governor urged to expand Medicaid eligibility (3/27/13)
Arkansas Medicaid expansion attracts other states' interest (3/26/13)
Senate president prefers options remain open on Medicaid expansion (3/25/13)
States urged to expand Medicaid with private insurance (3/22/13)
Senate budget amendment underscores opposition to Medicaid expansion (3/21/13)
Study: Kansas employers face millions a year in possible penalties without Medicaid expansion (3/15/13)
More than 30 Kansas groups pushing for Medicaid expansion (3/12/13)
Health insurers see big opportunities in health law’s Medicaid expansion (3/8/13)
Medicaid expansion supporters to step up lobbying efforts (3/7/13)
Budget committee hears resolution opposing Medicaid expansion (2/22/13)
Legislators focusing on Medicaid expansion cost estimates (2/19/13)
Kansas hospital group study predicts expanding Medicaid would generate 4,000 jobs (2/18/13)
Brownback officials release their cost projections for Medicaid expansion (2/8/13)
Medicaid expansion bill introduced (1/22/13)
Kansas hospitals worried about loss of dollars for charity care (1/14/13)
Brownback compiling own estimate of Medicaid expansion cost (12/20/12)
Group urges Brownback to expand Medicaid eligibility (11/9/12)
Debate begins on possible Kansas Medicaid expansion (10/25/12)
Amerigroup CEO says states ‘need’ to go along with Medicaid expansion (7/11/12)
Kansas hospitals ready to get on with federal health reform, spokesman says (7/2/12)
Kansas AG claims partial victory in health reform case (6/29/12)
High court upholds Affordable Care Act, but ruling puts limits on Medicaid expansion (6/28/12)

→ Kansas Hospital Association: An opportunity for the Kansas Medicaid program
→ Americans for Prosperity-Kansas: Well-intentioned policies do more harm than good
→ Health Reform Resource Project: The cost of not expanding Medicaid
→ Rep. Jim Ward: Medicaid expansion essential for healthier Kansas
→ Rep. David Crum: Reasons for opposing Medicaid expansion
→ National Academy for State Health Policy: Much ado about Arkansas: Medicaid in the insurance exchange

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